Great things are happening to the stocks in this article. They’re all outperforming the market over the last month because of positive catalysts such as a new product line, constructive news flow, or even a loyal Reddit fanbase.
But not every company with momentum is a long-term winner, and plenty of investors have lost money betting on short-term fads. All that said, here is one stock we think lives up to the hype and two best left ignored.
Two Momentum Stocks to Sell:
Kulicke and Soffa (KLIC)
One-Month Return: +25.9%
Headquartered in Singapore, Kulicke & Soffa (NASDAQ: KLIC) is a provider of production equipment and tools used to assemble semiconductor devices
Why Do We Think Twice About KLIC?
- Products and services are facing end-market challenges during this cycle, as seen in its flat sales over the last five years
- Day-to-day expenses have swelled relative to revenue over the last five years as its operating margin fell by 27.7 percentage points
- Performance over the past five years shows each sale was less profitable, as its earnings per share fell by 26.9% annually
At $49.12 per share, Kulicke and Soffa trades at 33x forward P/E. To fully understand why you should be careful with KLIC, check out our full research report (it’s free for active Edge members).
Smith & Wesson (SWBI)
One-Month Return: +28.5%
With a history dating back to 1852, Smith & Wesson (NASDAQ:SWBI) is a firearms manufacturer known for its handguns and rifles.
Why Should You Dump SWBI?
- Sales tumbled by 10.2% annually over the last five years, showing consumer trends are working against its favor
- Poor free cash flow margin of 2.1% for the last two years limits its freedom to invest in growth initiatives, execute share buybacks, or pay dividends
- Shrinking returns on capital from an already weak position reveal that neither previous nor ongoing investments are yielding the desired results
Smith & Wesson’s stock price of $11.13 implies a valuation ratio of 39.9x forward P/E. Check out our free in-depth research report to learn more about why SWBI doesn’t pass our bar.
One Momentum Stock to Watch:
Sezzle (SEZL)
One-Month Return: +29.2%
Founded in 2016 as an alternative to traditional credit cards for younger shoppers, Sezzle (NASDAQ:SEZL) provides a payment platform that allows consumers to split purchases into four interest-free installments over six weeks at participating retailers.
Why Are We Fans of SEZL?
- Impressive 67.8% annual revenue growth over the last two years indicates it’s winning market share this cycle
- Performance over the past two years shows its incremental sales were extremely profitable, as its annual earnings per share growth of 173% outpaced its revenue gains
Sezzle is trading at $74.05 per share, or 17.1x forward P/E. Is now the right time to buy? See for yourself in our comprehensive research report, it’s free for active Edge members .
High-Quality Stocks for All Market Conditions
The market’s up big this year - but there’s a catch. Just 4 stocks account for half the S&P 500’s entire gain. That kind of concentration makes investors nervous, and for good reason. While everyone piles into the same crowded names, smart investors are hunting quality where no one’s looking - and paying a fraction of the price. Check out the high-quality names we’ve flagged in our Top 5 Growth Stocks for this month. This is a curated list of our High Quality stocks that have generated a market-beating return of 244% over the last five years (as of June 30, 2025).
Stocks that made our list in 2020 include now familiar names such as Nvidia (+1,326% between June 2020 and June 2025) as well as under-the-radar businesses like the once-small-cap company Comfort Systems (+782% five-year return). Find your next big winner with StockStory today for free. Find your next big winner with StockStory today. Find your next big winner with StockStory today
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